AOL CEO Says Scalability Is Needed in Native Advertising

Calls on publishers to unite around standards

For all the good native advertising does for brands, a big roadblock the digital ad form faces is its ability to scale, said AOL CEO Tim Armstrong at a breakfast event this morning in New York.

"I think it's beneficial, overall, for brands. I think there's a danger, though, that native advertising that's not scaled is not going to solve the issue that publishers have in terms of monetization. So I think what needs to happen is native advertising at scale," Armstrong said at a Media Minds discussion hosted by the Knight Foundation and Gannett.

Armstrong called on the publishing community to band together to create standards around native advertising. If a company can't do it at scale, Armstrong said, "it's going to end up being too expensive to actually create native ads on all these different platforms, and that's going to even lean more heavily into programmatic, because it can be done at a high scale."

In the long run, with online services becoming more global and attracting more users, small-figure native ad campaigns just won't make much sense, Armstrong added. "I think we can all help ourselves out by having native kind of connected together," he said.

Armstrong's deputy, CEO of AOL Brand Group Susan Lyne, followed up to note that native is especially effective on mobile. Ads that fit into the user experience on mobile are a "much less intrusive way to engage with a consumer" than miniature banner ads or full-screen takeovers, she said.

Earlier in the program, Armstrong touched on what he and his company believe are today's "mega trends" in advertising. It essentially comes down to two things, he said: deep marketing services, such as brands being integrated into events, and programmatic, machine-to-machine ad buying.

The advertising market, Armstrong continued, is starting to resemble Wall Street, with real-time ad buying. And eventually, he said, it will move beyond real-time, and there will be "massive future markets" where people will bet on the predicted value of ads.